During his quarterly financial results call, Apple's chief financial officer Peter Oppenheimer revealed that the company will make a key "product transition" that cuts back on its profit margins to help shut out rivals.

A frequent point of discussion during the hour-long call, the mystery transition will drop Apple's gross margins from 34.8 percent in the spring quarter to just 31.5 percent in the July-to-September window in which the update takes place, ultimately settling at about 30 percent during Apple's fiscal 2009.

Oppenheimer is deliberately short on details, not wanting to pre-announce the product or allude to its nature, but explains that cost will be a driving factor.

The Cupertino, Calif.-based company often introduces products to the market with new technology at a high price, according to the executive, but often seeks to drive the price lower over time. It never wants to create a profit margin so wide that it creates an "umbrella" for rivals that lets them safely undercut Apple's pricing and steal sales.

The new, unnamed product will continue to have "technologies and features that others can't match," according to the CFO.

While notions of what this transition entails are likely to become clearer soon, several product categories are just now reaching the ends of their typical cycles, with updated MacBooks, the Mac mini, and new iPods all due for refreshes or replacements in the near future. Apple is also still believed to be developing its multi-touch tablet but has slipped out little extra information beyond leaks near the start of 2008.

Tablet : unlikely, as that would be a totally new product, not a transition.

Mac Mini becomes the xMac: I wish, but I don't think so. Oppenheimer said Apple "often introduces products to the market with new technology at a high price, but often seeks to drive the price lower over time". The Mac Mini is hardly new.

So mysterious - a "new product" that will shut out rivals. The only products Apple sells that can shut out rivals are iPods, and there already are no real rivals, and not likely to be any in the future. The iPod Touch is of course due for a price reduction.

The Apple TV? I don't see how anything regarding the Apple TV could shut out rivals, since the market is so small and fragmented right now, and Apple doesn't have enough content.

Maybe it's a big push with notebooks, which are due soon anyway. Big price drops, is that it? Could be a good idea, back to school season (slightly late), but with the gains in market share already this year, maybe it would start a flood of new buying (but it wouldn't "shut out rivals").

Better call Chief Inspector Foyle...

Addendum: As pointed out above, the Macbook Air - that could shut out rivals in that category (adding some needed features along with a good size price reduction).

They do know how to stir the pot of rumor and speculation. My guess is they are replacing the chips (possibly in laptops) with chips of their own design. Isn't that why they acquired PA semi? That would be a transition to shut out rivals.

So mysterious - a "new product" that will shut out rivals. The only products Apple sells that can shut out rivals are iPods, and there already are no real rivals, and not likely to be any in the future. The iPod Touch is of course due for a price reduction.

The Apple TV? I don't see how anything regarding the Apple TV could shut out rivals, since the market is so small and fragmented right now, and Apple doesn't have enough content.

Ah but wait, that isn't true. The iPods have already "shut out" rivals. They don't need to, they have 90% of the market.

But iPhone is a product in which Apple could "shut out" rivals, and Lord knows, there are rivals to the phone.

Could this be another price drop, or could it be another phone? Perhaps something lower down the food chain for the folks who can't afford the current model, or maybe even a NEW device that utilizes some of that 700mhz bandwidth that Google bought?

They do know how to stir the pot of rumor and speculation. My guess is they are replacing the chips (possibly in laptops) with chips of their own design. Isn't that why they acquired PA semi? That would be a transition to shut out rivals.

although it could easily have just been to distinguish the new model from the original iphone, i did notice the addition of 3G to the iPhone name. the only other products that have a second name are iPods, which come in various models. So that could or could not be significant in terms of product transition.

plus, nothing like a smaller entry level iphone to upsell the big iphone. apple does love the upsell.

You can read it however you want it.
I read it as we are going to get the jump on our competitors by announcing a Nehalem Mac Pro before anyone else! It seems that all the other product lines are sexier than the Mac Pro, but I honestly want a good tower upgrade. Please?

Apple can grow Mac share, but no matter what it does, it cannot shut off rivals because 95% of the market is still Windows PC.

I already said in the other thread - it can be an iPhone Nano - a smaller iPhone with T9 keypad. Apple's trying to pre-empt the market segment of smaller touch screen phone with touch screen, mainly Android phones.

It could be a game pad, but I don't see how Apple should shut off rivals with GB and PSP already in the established market.

Well, they kept mentioning "transition" and not "new" products so I would have to put my money on the iPod line. Especially since they are gearing up for the back-to-school and holiday season and they need to refresh the line to generate continued sales.

My guess is that they drop the iPod Classic and come up with refreshed touches in both flash and hard drive models with added GPS like the iPhone. With the addition of the App Store, you can easily see how Apple has built an infrastructure that the competition just can't match. There may also be a Tablet sized touch but I would put a product like that in the class of the MacBook Air. In other words, it would probably sell well but it wouldn't be a mass consumer device.

I'm also guessing that Apple may plan to defer revenue of sales on these new touches the same way that they are doing for the iPhone. This would have the affect of moving a large chunk of revenue to the deferred side of the books and could easily account for the lower guidance that Apple is offering...

Suggestions that the product transition involves the mac mini or apple TV don't seem to fit the facts, given that these products lack the volume required to have that much of an impact on overall margins. Of course, the lowered margins for Q4 is partly due to the ipod touch giveaway. Still, that one quarter event doesn't affect the 2009 margins down to 30% news. This has to be something that sells currently in significant volume.

Hmmm.. Makes me think it is the iPod line and that all models will transition into touch versions.. The competition certainly couldn't match that and it would certainly cut into profit margin and it certainly is a transition..

Looking into my crystal ball I can see a take 3 on a certain hobby product... it is a little bit hazy but it looks like this time it will be with 1080p, DVR, and something else, hard to see, wait a sec, it is a... yes!, a BluRay drive. And it is cheap and will sell in millions
Oops, it is not a crystal ball, it's a wishing well I am staring into...

Hmmm.. Makes me think it is the iPod line and that all models will transition into touch versions.. The competition certainly couldn't match that and it would certainly cut into profit margin and it certainly is a transition..

Yes, the more I think about this the more it makes sense..

Apple will do away with the iPod classic and the iPod touch will be the replacement with a larger capacity drive.. This will cost more and affect margins..

The iPod nano will also transition into the "iPod nano touch" with a smaller screen and the same storage capacities as the current nano's.. It will probably not have all the same functionality as the big iPod touch but I can totally see coverflow and video on a smaller nano. And think about the app store, Apple want's as many users as possible buying and downloading these apps.. Again, the competition couldn't touch this (no pun intended.)

Perhaps they do a HDD to SSD transition across the whole Mac line shocking us all. Doesn't Intel have this supposedly "fantastic" SSD tech on the way that they brag about being superior to all other SSD's out there with some (seriously) extraordinary test results? If they're ready to deliver they would defenitely catch the competition off guard.

I thought I remember hearing about Apple asking Intel to make some specialized ATOM chips for them a while back... I'm thinking a tablet like thing that utilizes this processor. Or maybe the MacThin (an even smaller Mac Mini? But I doubt there is a market there other than HTPC, in which they already have aTV) There really aren't that many good tablets out there though, and with Apple's "coolness" factor, it could pull away big.

But, then again, its Apple... so you know its just going to be a fun toy to show off. A computer in any form is still a computer in my mind. So far, they all do the same stuff given the right software. It just depends on how stable or good looking you want it to be.
So far, I'm bored. Back to Ubuntu. (And it'd be nice to see Compiz Fusion for OS X!)

I have to wonder if that has something to do with "Snow Leopard", which IMHO has the potential to be a slow starter because they may not support it on some platforms currently in use. I've also found the feature list so far un-compelling. The term "Snow Leopard" has me thinking they are aiming for a release this winter, which means it may be announced soon.

Another possibility is moving the entire iPod line to a new processor and an OS based on the one in the iPhone/iPod touch.

Other possibilities already mentioned are some full or partial transition to SSD (partial in the sense that you might combine a small SSD with a hard disk). Or moving to Blu-ray, which would would include supporting HDCP (including possibly in their monitors).

I think that "transition" is the key word, like the transition to Intel processors.

Looking at the Apple line up the iPod stands out as ready for a transition to the OS X version that the iPhone/touch is using. Now that would be a transition.

Other transitions could relate to some of the Apple patents we have read about, such as iPhone touch displays on iMacs & notebooks. Don't know if the technology is there to make it financially viable, but it sounds interesting.

Also mentioned was that there was only 3 - 4 week inventory in the channels, but that would reference "new products" and there was mention of exciting new products coming during the rest of 2008. My guess is that new MacBooks would fall under that group.

Apple will do away with the iPod classic and the iPod touch will be the replacement with a larger capacity drive.. This will cost more and affect margins..

Except that I doubt that they sell enough of either model to make a noticeable difference in their overall margins. Whatever this change is, it has to have absolutely huge sales to make that big a dent. It's probably more like a sweeping change that affects all laptops, or all desktops, or all iPods, or a big expansion of iPhone.

Except that I doubt that they sell enough of either model to make a noticeable difference in their overall margins. Whatever this change is, it has to have absolutely huge sales to make that big a dent. It's probably more like a sweeping change that affects all laptops, or all desktops, or all iPods, or a big expansion of iPhone.

Did you read the rest of my post?

I said ALL iPODS will transition into touch versions, including the "iPod nano touch."

It's all about getting the "app store" on as many devices as possible. This is a clear way to shut out the competition..

I'm not saying this is the only release, however I reckon the Mac Mini is going to be rejuvenated which will probably match the new macbooks that are coming out soon.

Lets face it, the new mac mini is on the cards, and the apple engineers are busy trying to think of new ways to cram a kitchen sink into a box the size of a cigarette packet!

My Personal Predictions:

* New macbook
* New macbook Pro

and last but not least

* a New Mac Mini.

On the off chance that Jobs is reading this, I would like to advise him, that if he was to instruct his Apple Minions to design a Mac Mini, that has the upgrade facilities parrallel to the Macbook range, and drop the price about £50, you will have seriously high demand for these.

People are now looking for their 2nd or 3rd home PC, and a wee toatty Apple would be just the ticket!

One last point - If the apple engineers produce a mac mini based on the Spec of the current macbooks, then you know Apple are seriously daft.

Hopefully, using common sense, the new mac mini will complement the unrelease macbook which should arrive in a month or so.